…This un-American, two-tiered system of justice opens prisons for community bankers, while allowing Wall Street to pay for its sins with shareholder money. Preston L. Kennedy, President and CEO Bank of Zachary Zachary, La.

“I agree with Mr. Kennedy’s “unfair, un-American two-tier system points about banks/bankers.” Unfortunately, I experienced it first-hand and am still recovering. I don’t think he, nor most Americans, understand though that JPMorgan was coerced by the our current liberal government into these settlements, so that they could “cement” their false narrative that greedy and reckless bankers (and poor regulation) were the primary causes of the 2008 financial crisis. It’s working to an extent, but that’s to many people like myself (libertarians, conservatives, think tanks, economists, etc.), who are determined to study the facts and publicly write about it, the truth is finally emerging and will continue to emerge.”, Mike Perry, former Chairman and CEO, IndyMac Bank

April 13, The Wall Street Journal

Opinion

The Big Banks Are More Equal Than Others

The reliance of the largest banks on a government guarantee against failure has destabilized the banking ecosystem.

The correspondent banking system that Jamie Dimon describes (“Large Banks and Small Banks Are Allies, Not Enemies,” op-ed, April 6) has existed for 200 years. While the story of our financial system is one of interdependence, the reliance of today’s largest banks on a government guarantee against failure has destabilized the banking ecosystem and threatens institutions not deemed “too big to fail.”

Community banks are critical of the largest financial firms, not merely due to their size but because concentrating most of the industry’s assets in a handful of banks puts the entire system at risk. The 2008 crisis showed that the largest banks are powerful enough to bring down the financial system, prompt a multitrillion-dollar taxpayer backstop and cause massive economic disruption which exacerbated banking industry consolidation. This isn’t a question of large and small. It’s a fundamental question of concentration, risk and moral hazard.

America faces many challenges and one of them is how to address the systemic risks posed by our too-big-to-fail institutions.

Camden R. Fine

President and CEO

Independent Community Bankers of America

Washington

Regulations brought about by actions of banks like Mr. Dimon’s are absolutely affecting our ability to serve members and the communities in which we live and work, through no fault of our own.

The regulatory cost impact on the credit-union industry was $6.1 billion in 2014, and the lost revenues to credit unions from services that were discontinued or reduced because of added regulation is at least an additional $1.1 billion. This total impact of $7.2 billion is equivalent to an astonishing 80% of industry earnings and 6% of our credit unions’ net worth.

It’s time for policy makers to act by recognizing the need for regulatory relief for credit unions and small banks.

Jim Nussle

President/CEO

Credit Union National Association

Washington

Community banks have been strangled by a wave of regulation designed to reign in the systemically dangerous “mistakes” of Wall Street, for which J.P. Morgan Chase has paid more than $23 billion in fines.

Mr. Dimon implies that Main Street is “inventing conflicts where none need exist.” From his lofty perch on Wall Street, and with the blessed assurance of too-big-to-fail/too-big-to-jail status, one can forgive Mr. Dimon for not being able to recognize the strife endemic within a system that guarantees an unlevel playing field. Community bank “mistakes” end in financial ruin and criminal referrals. This un-American, two-tiered system of justice opens prisons for community bankers, while allowing Wall Street to pay for its sins with shareholder money.

Preston L. Kennedy

President and CEO

Bank of Zachary

Zachary, La.